- Tight availability supports scrap prices despite liquidity
- Buying activity expected to pick up January
Pakistan’s imported shredded scrap prices were unchanged w-o-w at $358/t CFR for the week ended 23 December. Imported scrap market activity remained subdued, with overall sentiment quiet and momentum limited. Offers were heard slightly higher, but there was no buying interest from Pakistan, due to year-end activities. We expect sentiment to improve from January 2026 onward. Only small quantities were booked.
Europe/UK-origin shredded scrap was offered at $360-364/t CFR Qasim, but there was no buying interest. Local buyers remained largely silent amid year-end slowdowns.
Scrap prices remained firm, supported by extremely tight availability and mills returning for forward coverage, despite ongoing liquidity constraints.
Around 5-6 deals from Europe/UK shredded were heard booked at $355-362/t CFR Qasim.
According to market sources, Pakistan continues to face a US dollar shortage, limiting scrap import transactions. Many currency exchanges sell only small amounts, forcing buyers to pay unfavourable rates or delay payments.
New SOPs, including biometric checks and cheque requirements, complicate access. While digital dollar-pegged currencies offer alternatives, regulatory gaps and potential hoarding pose risks to timely scrap procurement and trade.
Ship-recycling market
Pakistan is expected to enter 2026 with cautiously improving prospects. The recent HKC certification of the first Gadani recycling yard marks an important milestone, with additional yards expected to achieve certification in early 2026. This positions Gadani to play a more meaningful role in the evolving post-HKC global ship recycling market.
However, persistent DASR approval challenges continue to disrupt vessel deliveries, keeping buyers cautious despite Pakistan remaining competitively priced. Delays and regulatory uncertainty have limited regular inflows, weighing on overall market confidence. On the domestic front, fundamentals are supportive, with local steel plate prices climbing above $580/t and the PKR remaining relatively stable near the 280 level. If regulatory bottlenecks are gradually resolved and HKC capacity expands as anticipated, Gadani is well-positioned for a noticeably busier and more consistent year ahead.
Outlook
The near-term outlook remains bearish; however, buying activity is expected to pick up toward mid-January 2026 as consumers return to the market for restocking.
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